Multinational banks operating in Kenya have failed to keep pace with the rapid expansion of their homegrown rivals, resulting in a loss of market share that has seen Standard Chartered Bank Kenya drop off the list of tier one lenders.<\/p>\n
Newly published data by the Central bank of Kenya (CBK) shows that locally homegrown institutions such as KCB Bank Kenya and Equity Bank Kenya have progressively claimed a larger share of the market as measured through net assets, customer deposits, loan book, deposit and loan accounts and shareholder equity.<\/p>\n
Stanchart and Absa Bank Kenya, which are majority owned by UK multinational Standard Chartered Plc and South African lender Absa Group respectively, have seen their share of the market fall over the past seven years, pointing to slower growth in assets and deposits compared to the local lenders.<\/p>\n
The most marked decline has been on Stanchart, whose market share fell from 6.37 percent in 2019 to 4.5 percent in 2025, resulting in its drop into the second tier of banks. In 2019, the lender was ranked sixth in size in the market, but has since then been overtaken by DTB, I&M Bank and Stanbic Bank.<\/p>\n
Absa\u2019s market share dropped from 6.8 percent to 6.4 percent over the seven years, although the bank maintained its position as the country\u2019s fifth largest lender by market size. Stanbic, which is controlled by South Africa\u2019s Standard Bank Group, expanded its market share from 5.64 percent to 5.8 percent in the period.<\/p>\n
CBK segregates the banking tiers based on a market size index, with the top tier comprising those with a share of five percent or more.<\/p>\n
Tier two or medium sized banks have a market share of between one and five percent, while those with a share below one percent each are classified as tier three or small banks.<\/p>\n
The market is dominated by the large banks in terms of assets and profits, but this was dented last year by the movement of Stanchart into the tier two group. Sidian Bank also crossed into the medium size peer group from tier three, after doubling its market share from 0.53 percent to 1.1 percent within the space of 12 months.<\/p>\n
\u201cBanks in the large peer group decreased their combined market share to 69.7 percent in December 2025 from 75.6 percent in December 2024 due to the exit of Standard Chartered Bank Kenya from large to medium peer group,\u201d said the CBK in its bank supervision report of 2025 that was published on Wednesday.<\/p>\n
KCB led the banking sector with a market share of 17.3 percent as at December 2025, followed by Equity and Co-operative Bank of Kenya at 11.8 percent and 9.4 percent respectively.<\/p>\n
KCB\u2019s share has expanded from 13.89 percent in 2019 and Equity\u2019s from 10.24 percent, deepening their hold on the market within a period in which their respective balance sheets have risen above the Sh1 trillion mark.<\/p>\n
KCB grew its net assets from Sh674.3 billion in 2019 to Sh1.49 trillion in 2025 while Equity\u2019s net assets doubled from Sh507.5 million to Sh1.04 trillion over the same period.<\/p>\n
In contrast, Stanchart\u2019s net assets grew by only a fifth to Sh364.5 billion from Sh302.3 billion.<\/p>\n
Absa\u2019s net assets meanwhile rose from Sh374.1 billion to Sh536.7 billion, a growth of 43.5 percent.<\/p>\n
The faster expansion of the local lenders has partly drawn from their investment in digital and physical outlets to gather larger volumes of deposits and hand out more loans, in contrast to the more conservative approach of the multinationals.<\/p>\n
Multinational lenders have also been more willing to distribute a larger share of their profits as dividends to their shareholders, while the likes of KCB and Equity have withheld more to fund growth.<\/p>\n
In the financial year ended December 2025, Stanchart distributed Sh11.71 billion in dividends at a rate of Sh31 per share, which was equivalent to 94 percent of its net profit of Sh12.44 billion in the period.<\/p>\n
Absa paid out 49 percent of its net profit of Sh22.9 billion to shareholders as dividends, equivalent to Sh11.14 billion, while Stanbic paid out 64 percent or Sh8.8 billion out of its net earnings of Sh13.72 billion.<\/p>\n
KCB, at group level, meanwhile distributed 34 percent of its net profit, translating to a payout of Sh22.49 billion against net earnings of Sh66.82 billion. Equity Group had a payout ratio of 30 percent after distributing Sh21.7 billion from its net profit of Sh71.96 billion in 2025<\/p>\n
Compounded over a number of years, the retained profits for the lenders give them a sizable capital war chest with which to lend more to customers and government, and also to fund regional expansion that further bolsters the bottom line.<\/p>\n